Finance, Looks

Black and Pearls and Tax Refunds

Blog 03-15 287e

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 Dress: Topshop here and here | Necklace: Shopbop | Earrings: Chanel, no longer available, Similar: Tory Burch | Shoes: Topshop | Bag: Zara.  Almost identical: Kate Spade | Sunglasses: Ann Taylor | Watch: Michael Kors | Lipstick: Mabelline Pink Satin | Nail Polish: Gelish All Haile the Queen

It’s no secret I gravitate toward comfortable work dresses, especially when my days are 12-13 hours long.  This one has been hands down my favorite.  I pull it over my head and. . .done.  I have no problem going all day in this one.  It is truly so comfortable.

Accessorizing is easy.  Everything goes with black, and just about anything goes with the super-simple lines of this T-shirt-like dress. Black and Pearls – isn’t that a natural? If the body-hugging style scares you, throw on a long, light sweater or Kimono-style jacket and you’ll still reap the comfort benefits.

I’m sure you’ll see this dress again because it’s such a great blank canvas for so many different looks.  I’ve worn it several different ways to work and just out-and-about.  This look in particular can go from work to dinner without missing a beat.

Speaking of work, I’m down to the last 3 weeks of tax season!!!  I haven’t done many Money Mondays because you’ve told me you like the clothes more than the money talk.  Me too!  But I do want to briefly discuss my feelings about large tax refunds.

A lot of people like getting big refunds when they file their tax returns.  They withhold more tax from their paychecks than is necessary as a sort of forced savings plan.  I really don’t recommend this approach for several reasons.

First and foremost, although interest rates on savings accounts are very low, the interest rate on a regular tax refund is zero.  And you can’t get to your money until after the and of the year when you file your tax return.  If you need it in the middle of the year you’re out of luck.

Second, but also as important, a somewhat new and scary trend has been identity theft in tax return filing.  If someone beats you to the punch and files a return using your social security number, your refund can be tied up for months while IRS and/or your state gets the situation sorted out.  That big refund you get every spring may not show up until fall.

If you really want that chunk of change in the spring, the better thing to do is set up your own savings account and deposit the “excess” there.  By “excess” I mean that amount that represents the extra income tax you’ve been having withheld each paycheck.  To figure that out, take the average of your last two – three refunds. subtract $200-500 as a cushion.  Using the remainder, divide by the number of times you get paid each year.  That amount represents what i’m calling your excess.

Back to depositing the excess into your savings account.  If your paycheck is directly deposited, that makes it so easy.  You can have the amount that represented over-withholding deposited directly into a savings account and you’ll never miss it, but it’s available to you if you have an emergency.

If you don’t have direct deposit, I’d recommend putting that same amount of money into savings each payday.  It will take a little more discipline because you see the full amount of your paycheck and you deal with the temptation of using it all right away.

In both cases, to keep from tapping your savings account during the year, set it up at a different bank.  When your savings is sitting in a different bank it takes a little more work to access it than a simple online transfer to your checking account.

That’s enough serious talk for this week!  Have a great Wednesday everyone!

Helen

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